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RXi Ends UMMS Licenses for 'Non-Core' RNAi Tech But Stays Focused on RNAi While Partner Searching

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By Doug Macron

Following its acquisition of peptide immunotherapy firm Apthera in April, RXi Pharmaceuticals has terminated a number of its licenses from the University of Massachusetts Medical School for certain RNAi-related technologies, the company said.

Revealed in a filing with the US Securities and Exchange Commission this week, the move comes as little surprise given RXi's decision to pare down its RNAi programs following the Apthera deal.

However, it does not suggest the firm is moving away from the gene-silencing technology, according to President and CEO Mark Ahn. In fact, RXi has recently signed deals with four undisclosed pharmaceutical companies to evaluate its proprietary RNAi molecules, he said.

Separately this week, RXi reported a drop in second-quarter losses amid increased research and development spending.

According to Ahn, RXi continues to maintain its licenses to fundamental RNAi intellectual property held by UMMS, as well as its R&D relationships with the institution.

But, because the company has narrowed its focus with the gene-silencing technology onto a small number of targets and its most effective RNAi technology, “we ... trimmed some of our [licenses to] target patents … [and] other platforms that weren't progressing or we weren't prioritizing,” he told Gene Silencing News. “It didn't make sense to have such a huge royalty burden” for non-core technologies.

Ahn declined to specify which platforms or targets to which RXi decided to drop access, but noted that its self-delivering oligos, which do not require the use of a delivery vehicle, have yielded the most “consistent and durable knockdown results.” These, therefore, have become the focus of the company's RNAi efforts.

“We consider [self-delivering RNAi] to be the most promising way of breaking through the delivery logjam,” he said.

In April, RXi announced that it was acquiring Apthera — a move designed to diversify the company and explore potential synergies between their respective technologies (GSN 4/7/2011). Through the deal, RXi picked up Apthera's phase II breast cancer immunotherapy NeuVax.

At the time, RXi announced that it would stop work on all of its RNAi drug candidates except RXI-109, a dermal anti-scarring drug based on the self-delivering platform. However, Ahn stressed that the company remained “completely committed” to RNAi as a therapeutic modality.

“We have multiple [RNAi] constructs and have demonstrated promising in vitro and in vivo activity … [but] we now need to make the hard choices, making a preferential bet on our best leads and bringing them to the clinic,” he said at the time. “That requires resource allocation between continuing to do basic research and leveraging the platforms we already have into the clinic.”

This week, Ahn said that RXI-109 remains fully on track to meet the previously stated goal of advancing into phase I testing in the first quarter of 2012. At the same time, RXi is making strides in its longstanding effort to secure a big pharma partner.

Since it was spun out of CytRx in 2007, RXi has consistently missed its projections on forging alliances. Most recently, the company said it would find at least one industry partner before the end of 2010, but failed to do so.

The company has not provided a specific timeline for when a deal would be struck since the Apthera transaction, which included Ahn replacing Noah Beerman as CEO.

Still, Ahn said this week that RXi has recently signed material transfer agreements with four undisclosed pharmaceutical firms recently, three of which were inked this week.

Under the arrangements, RXi will provide the drug makers with self-delivering oligos against certain targets for evaluation.

“If we can show them good, durable in vivo knockdown against either their target or a target of interest,” then an actual partnership might follow, he said.

Ahn declined to provide specific timing for when a potential deal might be consummated.

Meantime, RXi is continuing to collaborate with Colorado-based Advirna, which developed the self-delivering technology and sold it to the company in late 2009 for therapeutic applications (GSN 10/1/2009).

This month, the National Institutes of Health awarded Advirna a six-month, $225,000 grant to develop an algorithm designed to help identify functional self-delivering RNAi molecules.

According to the grant's abstract, the molecules are hydrophobically modified RNAi/antisense hybrids that have shown the ability to silence gene targets, without toxicity, in a range of tissues including skin, muscle, tumors, alveolar macrophages, spinal cord, and the retinae.

Although Advirna is developing the molecules for research applications, Ahn said that RXi is working with it to develop the potency-prediction algorithm, which the grant abstract indicated would involve optimizing the molecules' structure, chemistry, targeting position, and sequence preferences.

Q2

As for RXi's second-quarter results, the company said net loss narrowed to $1.4 million, or $0.04 per share, from $2.1 million, or $0.12 per share, one year ago. The company attributed the decline to a “non-cash expense as a result of the change in fair value of warrant liability.”

R&D costs for the three months ended June 30 climbed to $2.7 million from $2.3 million year over year, largely related to NeuVax activities. General and administrative expenses slipped to $1.9 million from $2.5 million.

RXi had $17.9 million in cash and cash equivalents at the end of the quarter.


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